Banks' CBDC fever wanes, they now prefer other options
The preference for CBDCs is declining; by 2024, only 15% opt for them, while 65% look for other alternatives
The decline in interest in CBDCs drives the diversification of digital payments.
Alternatives such as stablecoins and tokenized deposits gain prominence in today's market
In a significant shift in the evolution of digital payments, most banks and financial institutions are changing their approach, now preferring to distance themselves from central bank digital currencies (CBDCs).
Although two years ago at least 52% of financial institutions had expressed their preference for CBDCs as their preferred mechanism to digitize their operations, today only 15% continue to value this option. This is according to the latest white paper published by Citigroup, which includes a survey of almost 500 institutions. 65% of respondents plan to use non-CBDC options, such as stablecoins, tokenized deposits, money market funds, and digital payment systems, to support cash and liquidity requirements for digital securities settlements by 2026, compared to 15% who plan to use CBDCs. This is a stark contrast to the previous year, when CBDCs were the preferred form of digital money at 52%,” Citigroup Securities Services White Paper.
The research suggests that while the transparency and on-balance sheet assets offered by CBDCs make them attractive, challenges in their development and the urgent need for practical solutions have led to a change of course.
As reported last year, more than 100 CBDC projects were looking to compete with bitcoin. This is even though the general public shows preferences for the currency invented by Satoshi Nakamoto.
